The Atlanta branch of the United States Federal Reserve Bank recently brought focus to Ripple’s operational framework and its utilization of XRP to fulfill requirements for cross-border settlements. As per the Reserve Bank, XRP is regarded as a “global payment medium.”
These references appear in the most recent version of the Atlanta Federal Reserve’s Policy Hub, titled “An Introduction to Web3 with Implications for Financial Services.” The document primarily emphasizes the potential of Web3 and the utilization of digital assets.
Furthermore, the report emphasizes the increasing rate of adoption of Web3 and blockchain technology by public organizations, including central banks. It highlights the significance of Project Mariana, a proof of concept introduced by the Bank for International Settlements (BIS), the Bank of France, and other financial institutions.
The article from the Atlanta Federal Reserve draws attention to Project Mariana’s objective of improving cross-border settlements by mentioning Ripple and Stellar as prominent blockchain-oriented companies that offer economical value transfers.
As stated in the report, Ripple’s operational framework revolves around delivering financial services utilizing XRP. Additionally, the report highlights that XRP is commonly regarded as an “international payment medium” or a coin suitable for wholesale settlements.
It is worth mentioning that the primary focus of this report is not specifically on Ripple or XRP but rather on the wider landscape of Web3. Nevertheless, the mention of Ripple and XRP has been positively received, highlighting the increasing recognition and interest that public institutions are showing towards XRP.
In addition, the paper does not explicitly declare any intentions of the Atlanta Federal Reserve to utilize XRP for settlements. This observation was highlighted by WrathofKahneman, a well-known influencer within the XRP community.
XRP by Ripple Paves the Way for CBDC Progress
The mention of Ripple in this context was not surprising, given the ongoing interest of various central banks in Ripple’s vision of a streamlined cross-border settlement system. It was reported by The Crypto Basic last month that Ripple collaborated with the Central Bank of Montenegro to assist in testing its digital currency.
Furthermore, Ripple recently introduced its CBDC platform, offering central banks the opportunity to build their own digital currencies. While institutions utilizing the platform can utilize XRP as an intermediary currency, it is not obligatory to do so. Presently, there is limited information available regarding the banks that have expressed interest in the platform.
Although the US Federal Reserve has not provided explicit communication regarding its plans to create a central bank digital currency (CBDC), it has been actively studying the potential implications of such a development. In March, Jerome Powell, the Chairperson of the Federal Reserve, revealed that obtaining approval from Congress would be necessary for the Fed to proceed with CBDC development.